In the EU, packaging of consumer products has long been an environmental challenge for manufacturers and retailers. As governments try to meet national recycling and recovery targets, they are questioning manufacturers’ commitment to the reduction of packaging and the increased use of recycled and recyclable materials.
Progress has been made, but instances of over packaging are still common, despite there being legislation in place that could have significant commercial impact.
Not only is the over packaging of products environmentally damaging and commercially wasteful – it could also expose manufacturers to the risk of losing market access under the EU Packaging (Essential Requirements) Regulations. The design of product packaging should not be solely decided on marketing criteria; the important questions for every manufacturer should be “is the packaging essential for the product’s safe transportation and distribution? Does the product have excessive packaging”?
The ‘Essential Requirements’ regulations were introduced to reduce the amount of packaging waste going to landfill and to minimise the concentration of heavy metals found in packaging. But these regulations have within them a hidden business opportunity. While some manufacturers may have been tempted to employ over packaging as a marketing technique to convince consumers they are getting better value for their money, there is a far better commercial opportunity on offer. Indeed, businesses can actually improve margins through cost reduction prompted by environmental compliance.
High street giant Aldi has shown that compliance with the EU’s Essential Requirements regulations and keeping packaging costs low by reducing ‘ullage’ – the amount by which a container falls short of being full – can be highly profitable. The filling of this empty space at the top of food and household goods packaging stimulates consumer confidence through this demonstration of value for money. It is also, as Aldi has shown, a highly efficient and environmentally compliant route to brand prominence, rich with savings for both consumer and manufacturer. Cutting packaging waste appears to have delivered Aldi a commercial advantage.
The key business opportunity, arising from compliance with Essential Requirements, is in reducing the cost of packaging materials and transportation. Also, most importantly, are the savings achievable through reducing Extended Producer Responsibility (EPR) fee-paying obligations by using lighter or more recyclable materials. This was well illustrated by WRAP’s (Waste & Resources Action Programme) 2006 trial to lightweight wine bottles. Clearly, the use of recyclable or recoverable materials is not merely a legal requirement – but can also be more cost effective at both a procurement and EPR level.
It’s important to remember that manufacturers must meet requirements on packaging volume, weight, ability to recover or reuse, the release of hazardous substances and the presence of heavy metals such as lead and cadmium. Companies must also be able to provide technical documentation, detailing how their packaging is compliant – this is essential in the event of a challenge, which can be made up to four years from the date when the packaging is placed on the market. Enforcement officers expect this to be supplied within 28 days.
At first glance, Essential Requirements compliance may seem daunting. However, embracing the legislation in terms of increasing the use of recyclable materials, and indeed, cutting manufacturing costs by reducing the amount of packaging used, could make a significant difference to your bottom line.
